Insurance

Insurance MCQs with Answers and Explanations | Life, Health & General Insurance Objective Questions

Enhance your understanding of Insurance and Risk Management with our comprehensive collection of MCQs with answers and detailed explanations. Topics include principles of insurance, life insurance, health insurance, fire insurance, marine insurance, reinsurance, risk management, premium calculation, claims settlement, insurance laws, and regulatory framework. These objective questions are ideal for students, teachers, and candidates preparing for competitive and professional exams (CA, ACCA, ICMA, MBA, BBA, CSS, PMS, NTS, FPSC, PPSC, UPSC, insurance licensing exams, etc.). Each MCQ is followed by a clear explanation to strengthen concepts, improve problem-solving skills, and boost exam performance. Perfect for practice, revision, and self-assessment in the field of Insurance.

661. Anti-selection means –

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Tendency of people who expect loss to take insurance eagerly leading to loss to the insurer
Tendency of people to go for small amount of insurance
Tendency of people who have good health to go for insurance
Non evincing keen interest in buying an insurance
✅ The correct answer is A.
Anti-selection means Tendency of people who expect loss to take insurance eagerly leading to loss to the insurer. Anti-selection is the tendency of people, who suspect or know that their chance of experiencing a loss is high, to seek out insurance eagerly and to gain in the process.

662. State which one of the following statements is correct

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Life insurance is the best savings scheme for all persons
Life insurance is the best investment scheme for young persons
Both the statements above are correct
Both the statements above are wrong
✅ The correct answer is D.
Both the statements are incorrect.
Life insurance is not only the best savings scheme for all persons. Life insurance is not only the best investment scheme for young persons. There are many other insurance also.

665. A valuation is done by a life insurer because

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It is a statutory requirement
It is necessary to be able to declare dividends to shareholders
It tells the insurer how well it is managing the business
All of the above
✅ The correct answer is D.
A valuation is done by a life insurer because It is a statutory requirement, it is necessary to be able to declare dividends to shareholders and it tells the insurer how well it is managing the business.

666. Stet the correct statement?

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In endowment assurance survival up to the end of the term as well as in between death will give the claimant the benefits of the policy
An endowment policy only survival benefit is available
In endowment cover only death benefit is there
Endowment plan and Term insurance are similar in benefits
✅ The correct answer is A.
In endowment assurance survival up to the end of the term as well as in between death will give the claimant the benefits of the policy.

667. Which of the below is one of the ways of defining surplus?

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Excessive liabilities
Excessive turnover
Excess value of liabilities over assets
Excess value of assets over liabilities
✅ The correct answer is D.
Excess value of assets over liabilities is one of the ways of defining surplus. A surplus is an excess of total assets over total liabilities. The trade surplus is likely to persist, and reserve assets, after all, are generating interest incomes. A pension fund has a surplus when its assets exceed its obligations to current and future pensioners.

668. What is the main objective of IRDA Regulations 2000?

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Protection of Insurance Company
Protection of policyholder and development of orderly growth of insurance business
Protection of insurance intermediaries
To earn for the Government
✅ The correct answer is B.
The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market.

669. Which is incorrect statement?

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Complainant has to approach a consumer forum before moving the Ombudsman
The complaint has to be lodged with in two year of the insurer rejecting the compliant
There is no separate financial limit of various forum and commissions
All of the above
✅ The correct answer is D.
All the statements are incorrect.
Complainant does not have to approach a consumer forum before moving the Ombudsman, The complaint has to be lodged immediately of the insurer rejecting the compliant and There is a separate financial limit of various forum and commissions.

670. Which of the following organization decides Repo Rate?

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SEBI
IMF
AMFI
RBI
✅ The correct answer is D.
RBI decides Repo Rate. Repo rate is the rate at which RBI lends to its clients generally against government securities. Reduction in repo rate helps the commercial banks to get money at a cheaper rate and increase in repo rate discourages the commercial banks to get money as the rate increases and becomes expensive.